Value prop on Cybeats is getting even better, says Haywood

After last week’s major supply chain hack, Haywood Capital Markets analyst Gianluca Tucci delivered a Technology & Cybersecurity update on Thursday, saying the value proposition is now even better for Canadian cybersecurity and software compliance company Cybeats Technologies (Cybeats Technologies Stock Quote, Charts, News, Analysts, Financials CSE:CYBT).

News broke last week that a small number of cryptocurrency companies had been hacked, reportedly by North Korean hackers who compromised 3CX, a common and widely-used VoIP application. The resulting breach, although focused on a few firms, used a backdoor program on their intended targets’ machines, but the hack had much greater potential reach, as 3CX is used by about 600,000 organizations worldwide, according to Wired magazine. 

The hack reinforces the need for SBOM applications (Software Bill of Materials), according to Tucci. SBOM is similar to a bill of materials used, for example, in the auto industry to identify sources for the various components of a vehicle. The same goes for software, where an SBOM gives a formal inventory of the software’s components along with technical information and it essentially provides a readout of a code’s origin, which helps with addressing potential security issues and vulnerabilities. 

Tucci said that’s where Cybeats comes in, as the company’s SBOM Studio is an enterprise-level product for software compliance, vulnerabilities and risk mitigation in the software supply chain.

“[The 3CX hack] is the one of the latest, more potentially damaging attacks on software supply chains, which only reinforces the thesis for SBOM tools which CYBT provides,” Tucci wrote.

“We believe this nascent subsector within broader cybersecurity is in an early adoption phase; however, instances like this 3CX attack will only accelerate its adoption curve, which CYBT should benefit from.”

Tucci noted that Cybeats, which went public this past November, has closed on seven deals and has nine ongoing Proof-of-Concepts and pilots and management defines its pipeline with 120 qualified leads.

Tucci said as the digital economy continues to expand, the cybersecurity threat grows at a pace. Moreover, he said the US Executive Order 14028 from last year, one which mandates attention to software supply chains from companies working with the federal government, is another indication of the growing focus on this aspect of cybersecurity.

“In a nascent subcategory of broader cybersecurity spend, Executive Order 14028 is driving enterprises to strengthen SBOM defences,” Tucci wrote. “Cybeats is a first mover in this category with limited competition who is observing early commercial adoption evidenced by recent press releases.”